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An order that Alphabet Inc.'s Google turn over customer data stored overseas relied
more on the specific storage technology at play than on an outdated federal email
privacy law, attorneys told Bloomberg BNA.

Magistrate Judge Laurel Beeler of the U.S. District Court for the Northern District
of California
ruled April 19 that Google must turn over customer data stored overseas subject to a valid
search warrant issued in June 2016 under the Stored Communications Act, 18 U.S.C. § 2701 (
In re The Search of Content That Is Stored At Premises Controlled By Google
, 2017 BL 129087, N.D. Cal., No. 16-mc-80263-LB, 4/19/17
).

The ruling may not offer real clarity sought by companies that store large amounts
of data in the cloud, such as Google, Microsoft Corp. and Amazon.com Inc., on whether
they must comply with government demands for the release of consumer data stored outside
the U.S. But it does offer some insight into how courts may parse the technological
issues surrounding the storage of data and identification of the consumers tied to
that data by focusing on the ability of the company to readily identify the citizenship
of a particular user.

The decision “focused on Google’s technology which splices single files into components
and then stores it in different locations around the world,”
Craig A. Newman, partner with Patterson Belknap Webb & Tyler LLP and chair of its
privacy and data security group in Washington, told Bloomberg BNA April 25. Unlike
the U.S. Court of Appeals for the Second Circuit’s decision in the
Microsoft Ireland case, where the software giant “stored files locally based on user geography,” Google
based its data storage practices “on network efficiencies,” Newman said. The decision
rested on whether “the data can be accessed rather” than where it is physically located,
he said.

A Google spokeswoman told Bloomberg BNA that the company didn’t have any comment on
the litigation.

Google Data Storage Practices

The case arises out of a June 30, 2016 search warrant that requested “specific email
accounts regarding subscriber information, evidence of specified crimes and information
about the account holders’ true identity, locations and assets,” the opinion said.

Google partially complied with the search warrant. The search engine giant turned
over records that could be traced to data centers in the U.S., but didn’t produce
data for accounts that were “stored exclusively outside”
of the U.S., the opinion said.

Data stored by Google would be “broken into component parts and different parts of
a single file may be stored in different locations,” the opinion said. The location
of data stored on Google’s servers “can change during the time period from when legal
process (such as a search warrant) is authorized and when it is served,” it said.

“Technology has been a defining factor” in recent decisions across the U.S. and courts
have offered “different legal justifications based on a service provider’s use storage
technology,” Newman said. The bottom line in these cases from Pennsylvania, Wisconsin
and California “is that a service provider’s location and ability to retrieve data
stored abroad have been considered decisive factors— not whether the data is subject
to protection under foreign law or is otherwise a violation of privacy rights,”
he said.

Bennett Borden, data analytics partner at Drinker Biddle & Reath LLP in Washington,
told Bloomberg BNA April 25 that cloud computing companies may be “offending”
the courts and judges by moving their data around the world. Courts see it as a “business
practice of hiding the data,” and that is what may have called the differing opinions
across the U.S.

Different Than Microsoft Ireland

In the landmark case of
In re Warrant to Search a Certain E-mail Account Controlled & Maintained by Microsoft
Corp
., the Second Circuit
held that the SCA doesn’t contemplate extraterritorial application and that the term of
art, “warrant,” used in the SCA was intended to protect privacy rights.

The Second Circuit said that the SCA focused on user privacy and determined that enforcing
the warrant and directing Microsoft to seize communications stored in Ireland would
be an unlawful extraterritorial application where Microsoft didn’t have to turn over
email stored on Irish servers.

In dissent, Judge Dennis Jacob said that “no extraterritorial reach is needed to require
delivery in the United States of the information sought” because the warrant asked
for data “already within the grasps of a domestic entity.” The dissent didn’t focus
on the specific location of the data but on whether a U.S.-based company had a warrant
properly served on it and that it could easily access the data. Three other dissenting
judges agreed under the same reasoning.

Magistrate Judge Beeler relied on the dissents for her ruling against Google.

Borden said that the Second Circuit properly focused on the fact that Microsoft could
distinguish between data belonging to a U.S. citizen and that of a foreign citizen.
The Google case is different because the search engine giant simply moved data around
the world “for algorithmic efficiencies”
and it doesn’t “know if data is related to foreign citizens”
in every example.

Together, these cases highlight the “stronger constitutional basis” for overturning
SCA warrants “where the data is located in another country compared to when the data
is located in the U.S.,” Borden, who is also Drinker’s chief data scientist, said.

Due to conflicting court standards, Congress needs to act on the decades-old SCA to
add clarity and certainty for the cloud computing industry and courts across the U.S.,
Timothy Newman, privacy associate at Haynes and Boone LLP in Dallas told Bloomberg
BNA. Courts shouldn’t have to struggle with an outdated standard, he said. Rather
“Congress could modernize the SCA and provide a clearer framework for analyzing law
enforcement requests for electronic communications,” Newman said.

If Congress fails to act “it’s very possible” that the case “will bubble up to the
Supreme Court.”

To contact the reporter on this story: Daniel R. Stoller in Washington at
dStoller@bna.com

To contact the editor responsible for this story: Donald Aplin at
daplin@bna.com

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